Yay For Bank of America!

Remember a little whie ago, when the Democrats in Congress said they were going to protect us from the big ol’ mean banks by limiting the fees they could charge merchants for processing debit charges? Well, ain’t that worked out just grand? Bank of America found a way to make up for their losses — now, they’re going to charge not the merchants, but the card holders for the service — five bucks a month.

This is a great thing B of A is doing for us. They’re reminding us of some very important principles.

First up, pretty much any time the government interferes in business to “help the little people,” it’s more than likely to end up boning the little people even worse.

Next, whenever the government decides that it needs to cut into business profits (either through increased taxes and fees, or limiting their ability to charge), the businesses will try to find a way to make up for the losses.

Finally, this presents a grand opportunity for other banks to steal away Bank of America customers by plugging how they don’t charge such fees, and actually care about their customers.

Under the law, corporations have a legal obligation to their shareholders to make as much money as they can. This isn’t a question of morality or fairness, but legal duty. And at Bank of America, they’ve calculated (accurately or not) that they will make more money by having this fee than they might lose from disgruntled current customers. And they’ve created an opportunity for the free market to test that theory — by giving B of A’s competitors a golden opportunity to score big PR points and look like “the good guys.”

The bankers involved have an opportunity to learn here, and show how well they understand market forces. And they have incentive — if they don’t learn, they will pay the price.

Sadly, the people who caused this situation — the politicians — not only probably won’t learn from it, but they won’t pay any price. Instead, they’ll keep bragging about what a wonderful thing they did for the little people — who are currently getting boned over by that “help.”

Thanks again, Democrats. Please, as a favor — stop trying to help us so much.